Carriage Services delivered third quarter results that exceeded Wall Street’s revenue and adjusted profit expectations, but the market responded negatively to the report. Management attributed the quarter’s mixed performance to strong preneed cemetery sales, which benefited from the resolution of earlier permit delays, as well as a notable increase in insurance-funded prearranged funeral sales. However, CEO Carlos Quezada acknowledged that funeral home volumes were weaker than anticipated during July and August, with a mid-single-digit decline, before rebounding in September. Quezada described the industry-wide softness in funeral volumes as broad-based, impacting both consolidators and independent operators.
Is now the time to buy CSV? Find out in our full research report (it’s free for active Edge members).
Carriage Services (CSV) Q3 CY2025 Highlights:
- Revenue: $102.7 million vs analyst estimates of $101.4 million (2% year-on-year growth, 1.3% beat)
- Adjusted EPS: $0.75 vs analyst estimates of $0.73 (3% beat)
- Adjusted EBITDA: $32.98 million vs analyst estimates of $31.74 million (32.1% margin, 3.9% beat)
- The company reconfirmed its revenue guidance for the full year of $415 million at the midpoint
- Management slightly raised its full-year Adjusted EPS guidance to $3.28 at the midpoint
- EBITDA guidance for the full year is $131 million at the midpoint, below analyst estimates of $132.4 million
- Operating Margin: 23.4%, in line with the same quarter last year
- Market Capitalization: $656.1 million
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From Carriage Services’s Q3 Earnings Call
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George Kelly (ROTH Capital): Asked about intra-quarter funeral volume trends and the outlook for normalized volume growth. CEO Carlos Quezada explained that volumes were down in July and August but rebounded in September and October, with expectations for 1% to 2% growth in funeral volumes next year.
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Liam Burke (B. Riley Securities): Questioned the drivers behind funeral home margin compression. Quezada attributed lower margins to decreased call volumes and the high fixed-cost structure of funeral homes, confirming no material impact from other expenses.
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Parker Snure (Raymond James): Inquired about the rollout and growth trajectory of insurance-funded preneed sales. Quezada outlined ongoing efforts to standardize and expand the sales model, while CFO John Enwright discussed technology-driven efficiency gains and the timeline for implementation benefits.
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Alexander Paris (Barrington Research): Asked about the impact of demographics and normalization of funeral service contract growth. Quezada pointed to stabilizing death rates and anticipated demographic tailwinds, but also highlighted the impact of seasonal factors like the flu season on short-term trends.
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Alexander Paris (Barrington Research): Sought detail on the recent acquisitions and future M&A pipeline. Enwright described an active acquisition pipeline focused on high-quality assets and explained that recent integration efforts are progressing well, with more deals expected in the next year.
Catalysts in Upcoming Quarters
In the coming quarters, the StockStory team will monitor (1) the impact of AI-enabled tools like Sales Edge 2.0 and Titan on preneed sales growth, (2) integration progress and financial contribution from recent acquisitions, and (3) stabilization in funeral volume trends as demographic shifts and seasonal factors play out. Additionally, we will track the company’s success in executing its divestiture strategy and leveraging partnership-driven insurance sales.
Carriage Services currently trades at $41.67, down from $43.57 just before the earnings. At this price, is it a buy or sell? Find out in our full research report (it’s free for active Edge members).
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